Greater affordability causes increased resale housing demand.

Only 1,813 new homes were sold in the prior month, down 53% from December 2007 and down 63% from the 20 year December average. Conversely, sales of all homes rose 51% last month compared to a year earlier, largely due to high numbers of foreclosure and distressed property sales in the southern CA six county region.

The reason behind the drop in new home demand may be attributed to greater affordability concerning resale property. The median house price in southern CA was $415,000 in January 2008, with 23% of homes sales being foreclosures. In a year's time, home values have dropped by a third to $278,000, while the foreclosure rate has risen to 56%.

What does this mean for the prospective buyer? It has become evident that the best deals for now are in resale homes, and with greater numbers of bargain hunters entering the market each day, there has never been a better time to buy than now.